Bitcoin is a journey, not a destination. Everyone is on their own path. Every morning, when I studied Bitcoin, I found myself more the fear, because the simplicity of Bitcoin unstructured included in the power and potential let me know humility. The more I learn about Bitcoin, the better I know how much I need to learn and how much I want to learn.
Bitcoin contains beauty.
I am studying Bitcoin on the shoulders of giants. These giants were the pioneers who explored the knowledge of Bitcoin before me and illuminated this path. In the past eight years, there have been dozens of moments in each morning study. After reading or hearing content that I felt would immediately and forever change my worldview, I had to put down my book or pause the podcast, quietly Stay for a while. If you carefully study Bitcoin with humility and remember Wallace wisdom: Sometimes the “most obvious, the most important reality is the reality of the most difficult to find,” then you will see a lot of things that can not be ignored. Of course I did. Here is my bitcoin ceremony in previous studies the most important epiphany a few moments.
The list is very long, I tried to condense it to four.
Saleability across time
Due to its scarcity and historical annual supply growth rate of only 1-2% , gold has always been a reliable store of value. There has never been a “gold hyperinflation.” Indeed, gold has maintained its value for hundreds of years, while hundreds of other currencies have come and gone. But the supply of gold cannot sustain its demand. If we assume that the price of gold will rise to 100,000 US dollars/ounce tomorrow (more than 50 times overnight), we can be sure that massive resources will immediately be transferred to the gold mining industry, and miners will find some way to accelerate their supply growth, and its value will follow decline.
In contrast, the supply cap of Bitcoin will always be only 21 million . Bitcoin’s annual supply growth will gradually approach zero over time, and the current annual supply growth rate has dropped to about 1%, which is the same as the historical annual growth of gold supply.
Although this is a far from perfect analogy, gold is the closest analogy to Bitcoin in the real world. The final supply of Bitcoin is fundamentally limited by the design of the protocol itself, and cannot be increased regardless of its value or the level of demand. Bitcoin is the first in the history increase the impact of their supply was not subject to demand a store of value.
From this perspective, a bit more like gold than gold coins – currency bits across time better marketability.
Cross-space saleability
When mankind crosses the historical stage of walking and horseback travel, across the stage of rapid development of high-quality and inexpensive commercial air travel, especially across the stage of the explosive growth of Internet power like the Cambrian, even the most keen investment in gold “supporters”, cross-space can be sold for gold itself is very low this serious flaw can not turn a blind eye.
Gold is hard to transport. The US government legal tender is much better than gold at this level. Although the periodicity of legal currency and artificially induced excessive inflation have greatly reduced its saleability over time, its saleability across space has made a huge leap.
Contrary to common misconception, Bitcoin movement speed in space much faster than legal tender, international long distance settlement may be capacity can be increased to about 500,000 pen transactions per day, and the settlement can be completed in about an hour, rather than The current international legal currency settlement takes 3-5 days or even longer.
Bitcoin protocol and network topology make national boundaries irrelevant, for the most vulnerable in the current world, fiat money inflation is the most serious areas of people, especially the powerful force of this (think of today’s Venezuela, Turkey and Lebanon).
Even in countries like the United States, please don’t confuse the speed of your Visa payment with the final settlement speed. When you buy coffee at Starbucks, no final actual settlement has occurred. Instead, your bank account and the bank where the Starbucks is usually 2-3 days after the final settlement, each bank should bear the credit risk in this process with each other, sometimes with disastrous consequences, although the specific number may be less , But it really exists.
Bitcoin can be settled in almost an hour. As a bearer tool, there is no credit risk in it. From this perspective, a bit like legal tender coins than the coins method – the bit legal tender coins have more than marketability across space, and it is not as legal tender liability formed, there is no credit risk.
Mining adjustment difficulty
All the elements used by Satoshi Nakamoto to create Bitcoin are not original except for the difficulty of mining adjustments. His genius lies in insight into how to combine a set of previous methods to solve specific problems together to solve a certain problem. These unresolved issues.
In my opinion, ” Mining Adjustment Difficulty ” is completely original by Satoshi Nakamoto. It is Satoshi Nakamoto’s most underestimated breakthrough contribution. It is the true genius application of game theory and the fundamental reason why the Bitcoin network is always safe.
What is the difficulty of mining adjustment?
Assuming that prices Bitcoin, so as to stimulate more investment in Bitcoin miner bitcoin mining (Remember, success will produce mining bitcoin reward, therefore, price and worldwide Bitcoin mining between the total excitation There is an ongoing connection). In this case, bitcoin mining agreement will automatically increase the difficulty of the new bitcoin transaction to create and verify the time is not shorter than the preset schedule (approximately dug a bitcoin every 10 minutes). In the same way, assuming that the price of Bitcoin falls, Bitcoin miners with higher marginal costs will then rationally shut down their mining machines. The Bitcoin protocol will automatically reduce the difficulty of mining, so that the creation of new Bitcoins and transaction verification will not be shorter than its preset timetable.
Why does the Bitcoin protocol make such an adjustment? If I tell you that the product of two prime numbers is a specific three-digit number, then let you guess two prime numbers (I also remind you that one property of a prime number is that the product of two prime numbers is unique, and any two prime numbers Multiplication will not be equal to it). My problem is not a closed solution, in fact, that you have to guess a random until you find the answer. Since I told you that the product of these two prime numbers has only three digits, you may be able to guess two prime numbers quickly. But suppose I tell you that the product is five or ten digits? What about twenty digits? You understand that this will get harder and harder, and then random guessing will become harder and harder.
Mining adjust the difficulty similar to the adjustment of product-digit prime number, is online at any given time is a function of the ability of mining. The more miners there are, the greater the number of prime number products. The fewer the miners, the fewer the digits. Even if all commercially operated Bitcoin miners and their supercomputing power mining pools suddenly go offline overnight, amateurs sitting in Starbucks and using laptops for mining can also guarantee the entire world The security of the Bitcoin network remains unchanged.
Brief summary: The difficulty of mining adjustment is the ” legacy ” of the attempts to decentralize electronic money in the past few decades. Mining difficulty adjustments ensure that the Bitcoin network generates a new Bitcoin block every 10 minutes, and all transactions are accurately and unchanged during this period.
It is these factors contributed to cross-time Bitcoin can be sold: the surge in demand even in times of Bitcoin, Bitcoin mining Bitcoin miners can not be faster, but if Bitcoin generated surge in the number, it will cause accidents Inflation. And this design guarantees that such inflation will never occur.
Adhering to Satoshi Nakamoto’s consistent low-key style, the adjustment of mining difficulty was described in his original Bitcoin white paper in only two sentences: “The difficulty of mining depends on the moving average of the average number of blocks produced per hour. If They are generated too quickly and the difficulty will increase.”
By the way, “mining difficult adjustment” can also limit the waste of energy, mining, miners mining further incentive, but compared with the Bitcoin able to withstand the impact of inflation, this benefit appears to be negligible.
Mining difficult adjustment has been continued for twelve years of testing, its global network of total power levels from only a few laptop initially, has been the rapid growth of the consumed energy equivalent to the electricity supply in New York City, in the process The total network power level fluctuates greatly. The volatility of the total network power requires the Bitcoin protocol to continuously adjust the difficulty of mining, which is similar to continuously adjusting the digits of the product of two prime numbers. And surprisingly, just as Satoshi designed, whether global mining capacity or variability change how Bitcoin network has maintained every 10 minutes to verify a new block … … every 10 minutes every 10 minutes.
Bitcoin’s energy consumption
Bitcoin energy consumption is to ensure that the sum of all the bits of the network security token mining machine consumed energy. Although the exact number is difficult to determine, a more reliable estimate is that Bitcoin’s global energy consumption is equivalent to the energy consumption of 8-10 million people . It is indeed a huge number. In the era of global warming, can this be a good thing?
First, the principle is: Compared with the current government monopoly of the central bank, Bitcoin is better able to perform the technical functions of the central bank. Automotive energy consumption far more than they replace bicycle and carriage, instead of the candle lights, central heating chimney unsubstituted, substituted computer typewriter bit credits are monetary system better, but the current consumption ratio central banking system The energy is much more. Throughout the long history of history, as long as free people make free choices and believe that the extra energy cost of the new technology they want is worthwhile, energy use will grow. Today, Bitcoin mining is conducted 24/7 without stopping. Bitcoiners all over the world believe that the price of energy use of Bitcoin is a price worth paying because Bitcoin is a better currency technology.
Secondly, practice: Bitcoin mining is unique in human history need not operate in the vicinity of human rallying point and can get profitable energy use. In the long run, this will quietly change the world in full view.
Before the advent of Bitcoin, energy scarcity problem has nothing to do with its never, but just need to be conducted to where it is needed most geographically. Before the birth of Bitcoin mining, the main destination of energy was the place of human life. The energy consumed by Bitcoin mining needs to be solved with a completely different problem. Thanks to satellite and wireless Internet connections, Bitcoin mining can be run anywhere.
For example, remote arid region has abundant water, clean water and electricity can be produced and used for Bitcoin mining, natural resources so as to be realized. Therefore, Bitcoin can realize the realization of isolated energy sources (such as waterfalls, flowing rivers, or buildable dams) all over the world. These areas are not yet developed because they are expensive to develop and cannot be connected to residential areas. Or a power grid close enough to the industrial zone.
As a result, Bitcoin can, through the introduction of location-independent, high-margin power to change the energy economy fundamentally. There has never been a case of profitable energy use that is not restricted by location in the world. It can become a reality now. And because of fossil fuels has become too expensive, can not be the guarantor of bitcoin mining profitable source of energy, I believe the only long-term profitable way Bitcoin mining operations will depend on hydropower.
Imagine the future of Bitcoin mining companies in uninhabited areas without subsidies—imagine waterfalls in sparsely populated areas in abject poverty in African countries—easy access to the Bitcoin network, establish a sound energy infrastructure, and transfer local clean energy for power generation to support mining bit credits. Once this has the industrial capacity, profitable infrastructure, it can be large-scale production. Let us build roads and houses, schools, hospitals. Human settlements were born.
The end result may be that people gather to settle around the new, Bitcoin-powered hydropower infrastructure , and more and more people gather near cheap clean energy. Historically, our energy challenge has always been to deliver energy to people. With Bitcoin, we can send people near energy.
Consider the current world’s major population centers—New York, London, Paris, and Tokyo. Each city is based on its geographic location, adjacent to natural harbors, waterways, and trade routes. Excluding energy factor in the causes of these cities, since their formation before the era of energy (for example, before the era of fossil fuels).
With Bitcoin provide for large-scale low-cost clean energy the profitable development of infrastructure, can bring a world more and more people living near the rich energy future era, the marginal cost of production is very low. This is important, because cheap energy is equal to the prosperity of mankind. That is an equation. Cheap energy = human beings flourish.
In addition to the monetary policy revolution has demonstrated Bitcoin, Bitcoin may also mean developing rich, the world’s largest catalyst clean, cheap energy. This has become one of the biggest catalysts for the global human development.
Do you understand why I all-in Bitcoin?
